SpaceX shares fall below $135 IPO price for the first time as rally cools

SpaceX shares fell below their $135 initial public offering (IPO) price for the first time on Wednesday, marking a significant shift in investor sentiment just over a month after the company’s record-breaking debut. The stock closed at $135.27, briefly dipping as low as $132.28, a decline that left investors who purchased shares at the IPO price facing paper losses. The drop underscores growing concerns about the sustainability of the tech sector’s recent rally and the risks associated with valuing companies based on ambitious long-term visions rather than near-term fundamentals.

The plunge came amid broader market volatility, with investors reassessing tech stocks following a period of rapid growth fueled by optimism around artificial intelligence (AI) and space exploration. SpaceX, which raised $85.7 billion in its June IPO and briefly achieved a valuation exceeding $2.6 trillion, has seen its stock erode much of that gains. The company’s share price has since fallen nearly 11% from its June 8 debut, with recent declines exacerbated by worries over its debt-funded AI investments and potential Federal Reserve rate hikes.

Justus Parmar, CEO of SpaceX investor Fortuna Investments, noted that profit-taking and liquidity demands from shareholders are contributing to the stock’s decline. “A lot of folks in the stock are wanting to take some liquidity, which is putting pressure on the stock,” he said. Analysts also pointed to the unwinding of overly optimistic positioning following one of the most anticipated IPOs in recent years. Daniela Hathorn, a senior market analyst at Capital.com, described the retreat as a mix of valuation reassessment and the natural cooling of market enthusiasm after a prolonged rally.

SpaceX’s financials have also drawn scrutiny. The company reported a $4.9 billion loss in the previous year, and many of its ambitious projects—such as orbital data centers and lunar missions—remain unproven. Steve Sosnick, chief market analyst at Interactive Brokers, highlighted that the lack of recent catalysts to justify the stock’s high valuation has left investors questioning its long-term prospects. “There hasn’t been anything lately to remind people of the reasons they bought SpaceX,” he said.

The stock’s inclusion in the Nasdaq 100 index failed to provide a boost, with shares dropping nearly 13% since the addition. Investors now turn their attention to the company’s first post-IPO earnings report, expected in early August, and the expiration of the first phase of the IPO lock-up period. This will allow eligible employees and early shareholders to begin selling portions of their holdings, a development that analysts warn could further pressure the stock.

Meanwhile, the outcome of SpaceX’s 13th Starship test flight remains a critical focal point. Success in developing the rocket is seen as essential for reducing launch costs and advancing the company’s long-term goals, including the deployment of orbital data centers. Parmar emphasized that the $85 billion in funding raised through the IPO is intended for multi-year growth, not short-term gains. “We’re still very early in this experiment,” he said. “It’ll take years to see how that plays out.”

The decline also reflects broader market shifts, with investors increasingly skeptical of AI-driven valuations. Matthew Maley, chief market strategist at Miller Tabak, argued that the breach of the IPO price “raises the narrative that the stock is up on fluff, on speculation, on froth, and not on real fundamentals.” This sentiment has been amplified by SpaceX’s $7.7 billion in AI-related capital expenditures, which accounted for 75% of its total spending in the first quarter of 2026.

Despite the current downturn, some analysts remain optimistic. A consensus price target of $247, according to Axios, suggests that 80% of 21 analysts surveyed still hold “buy” or “overweight” ratings for the stock. However, the road ahead for SpaceX appears fraught with challenges, as it navigates the gap between its lofty ambitions and the realities of profitability. For now, the company’s stock serves as a barometer of investor confidence in the intersection of space exploration, AI, and high-risk tech investing.